This is the second of four public corruption articles to appear in the monthly NAAGazette. These articles were developed by the attorneys who participated in the June 2012 National Attorneys General Training and Research Institute (NAGTRI) International Fellows Program.

This group was assigned to focus on legislative corruption and methodologies to address it. In their research the group focused on the role of campaign corruption and party politics in political corruption, and motivators for corrupt behavior by legislators. They also discussed best practices for promoting honesty and integrity among legislators and tools for improving the discovery and prosecution of legislative corruption.

There are countless ways that legislators in every country, at every level of government, gain improper benefit from misuse of their position. Public officials may engage in outright theft and acts of bribery, steal government funds, steer contracts to particular individuals or corporations in exchange for kickbacks, provide employment opportunities to family members and friends, take junket trips, create ghost jobs and ghost projects, scheme to obtain severance pay for terminated employees, and use staff and resources to run private businesses.

Specific examples of senators and representatives gaining improper benefits include the misuse of discretionary funding for operating expenses and pork barrel projects. Distribution of discretionary funds can be based on party relationships, given to favored beneficiaries, and used for kickbacks. Pork barrel funds are primarily used for large infrastructure projects, which have large cushions so that unnecessary extras — difficult to detect and often resulting in unlawful commissions — can be easily hidden. The misappropriation of these monies results in poorly conceived projects, unfavorable contracts, and injury to the environment and natural resources. This is a large problem in the Philippines, where the use of discretionary funds is beyond the scope of government audits and in certain United States jurisdictions, such as New York, which, like the Philippines, has limited reporting requirements. This is less of a problem in Mexico, where legislators must report all spending and in Hungary, where local legislators get discretionary moneys but spending has to be channeled through the administrative office of the local government as a check on the expenditure, which protects against abuse. The use of the money is publicly known and subject to prior approval.

Lobbying is a ripe area for corruption and difficult to monitor. Private companies and multinational corporations lobby for contracts and projects with legislators. In Hungary in 2006, the government introduced a bill requiring legislators to write memos when they met with lobbyists, but eliminated the law five years later because it was not being followed or enforced. However, lobbying is not embedded in Hungarian culture. In Taiwan and the Philippines, there are no lobbying laws, although lobbyists are not permitted to give money to legislators. However, lobbyists do pay legislators “under the table” to get contracts and projects.

The Role of Campaign Contributions in Political Corruption

Campaign contributions seem to be universally protected from scrutiny and oversight and are therefore ripe for abuse. There are reporting requirements in Taiwan, Mexico and the Philippines, but contributions are not honestly reported. In the United States, the right to financially support politicians is fiercely protected. In Hungary, campaign contributions are partially financed by the state and partially financed by private donations which are capped at a certain limit, but estimations reveal that additional unreported funds from secret sources are widely used. Campaign contributions create feelings of being beholden to the donor in appreciation for past contributions, and in expectation or hope of future contributions.

The Role of Party Politics in Political Corruption

Party politics have a mixed effect on political corruption. Generally speaking, competing political parties contribute to a less corrupt environment, while a party monopoly creates opportunities for corruption.

In some cultures, like Taiwan, corruption is culturally embedded and conviction in court is unlikely. The two-party system has helped, because media, although partisan, will ultimately investigate each party. Similarly, the competition between the Democrat and Republican parties in the United States contributes to a reduction in corrupt practices.

Opportunities for corruption abound when political power is concentrated in one political party. A monopoly in the legislature, which exists in Mexico and the Philippines, creates opportunities for corruption. In those countries, there are “party list” representatives who are not elected, but handpicked by the party in power. In Mexico, prosecutors have to get permission from Congress to take criminal action against legislators. It is very difficult to prosecute legislators. The same is true in Hungary. Even when there are blatant acts of public officials taking cash bribes, the investigation must be approved by Congress and moves very slowly.

In the United States, individuals protect corrupt members of their own political party to gain political advantage and prevent the other party from gaining political power, which is an incentive to cover up corruption.

Motivators for Corrupt Behavior by Legislators

Greed and power are the primary motivators for corrupt behavior by legislators. Corruption persists because legislators are dependent on contributors for their political survival. Donations come with express or implied pressure on the legislator to act in accordance with the wishes of the donor, either in acknowledgment of the donation received, or with the hope of engendering future financial support.

In the Philippines and in Taiwan, legislators are motivated by the desire to maintain a strong, wealthy and powerful presence in their respective political districts. Legislators are local elites who perceive their political office as a family business. If a congressman’s term has expired, a family member will run in the next election to save the spot for the original congressman to run again when he is eligible. The legislators are often wealthy landlords in their districts who can afford to run an election campaign with no fear of competition. Their campaign contributors are the large businesses in their geographic area, as well as business partners and associates of the legislator or his/her family. Legislators maintain their power by using intimidation and express and implied threats of retaliation or other consequences against those who report or complain.

Promoting Honesty and Integrity among Legislators

Deterrence can be accomplished by punishing past acts or taking measures to prevent future acts. Civil remedies can be used, such as forfeiture, civil lawsuits by the government against corrupt politicians, and administrative remedies, which are commonly used in the Philippines because they are more efficient and cost effective than criminal prosecution.

Grand juries can investigate corruption and make recommendations. Ethics commissions can be used. Ethics codes can be developed which can be incorporated by reference into penal statutes. High profile prosecutions, an effective counterforce within the legislative structure and education of the voting public, can contribute to a reduction in corrupt practices. The use of public investigative agencies with the power to hold hearings and issue public reports can serve as an effective deterrent to both legislators and private entities who would entice public officials, because both are dependent on their reputation and vulnerable to negative publicity.

The Philippines has an ethics code, but it is difficult to enforce and prosecute. Ethics codes are helpful because they can specify what conduct is permitted and prohibited, which makes it harder for individuals to claim vagueness or ignorance. Rules can be tailored to apply specifically to a particular official position, and criminal prosecution can result from violations of ethical rules. It is recommended that prosecutors continue prosecuting corruption cases against legislators even when the rate of success is less than desired, because this persistence has an effect on changing established conduct and norms. It also has a deterrent effect on others considering engaging in the same behavior.

While it may be difficult or impossible to create a precise statutory definition of corruption, courts are well suited to develop jurisprudence which test and create the boundaries of general corruption statutes. When Supreme Courts and Courts of Appeal interpret statutes and ethical rules, test them against constitutional standards, and apply them to specific factual scenarios, the resulting jurisprudence creates guidelines which continue to clarify the prohibited conduct. That is, however, a long-term evolving process, and the law that develops cannot be applied retroactively to the case that presented the problem.

An unbiased media is the best way to expose government corruption. The Philippine Center for Investigative Journalism is an independent media agency which criticizes and evaluates government activities. However, there must be rules which protect the identity of the informant. Comprehensive, effective and enforceable legislation is also key in fighting corruption in legislative bodies. Gaps in the criminal law create loopholes which make prosecution difficult. For example, in Hungary, there is no conflict of interest criminal offense, but in California there is a powerful conflict of interest crime which invalidates any contract in which a voting member had an interest. And while Colorado prohibits compensation for past official behavior, California lacks a similar penal statute.

Tools for Improving Discovery and Prosecution

A number of tools can be implemented to improve the discovery and prosecution of legislative corruption. Communication and cooperation between investigative and prosecuting agencies are key elements to successful prosecutions. In jurisdictions like the Philippines, where there is a separation between the investigative and prosecuting agencies, cooperation between those agencies should be implemented. Swiftness and certainty of consequences contribute to deterrence. This has been effective in the use of administrative remedies in the Philippines. Integrity testing can also be used. In Hungary, it is limited to police, but in Mexico it is used to test prosecutors, legislators, and judges.

Transparency and accountability help with the discovery and prosecution of legislative corruption. If there are consequences for the failure to follow straightforward and mandatory regulations regarding spending and reporting, irregularities will be quickly and easily detected. Strengthening government auditing processes to include funds currently outside the scope of government audits will promote transparency, and reduce abuses of discretionary and pork barrel funds.

In Mexico, greater financial transparency will decrease corruption and create public awareness about where funds are coming from and what they are being spent on. In Taiwan, informants are being rewarded for providing information about corruption. This practice has had some success.

There must be a credible threat of enforcement to the anti-corruption agenda. In Taiwan, corruption has decreased with the development of two parties because legislative officials feel a real threat of prosecution and conviction. With a one-party system, they felt safe. In Hungary, there is a zero tolerance policy so that all offenses must be prosecuted no matter how small. In some situations, increasing prosecutorial discretion may help with the prosecution and detection of corruption, by allowing prosecutors to make decisions about granting immunity to involved but reporting parties. In Hungary, no promises can be made by the prosecutor, and the issue of immunity is left to the judge, so participants have no incentive to come forward.